Friday, March 30, 2012

First Quarter window Dressing Complete

Little explanation needed for the results below. Pure window dressing on a day-long melt up by the fundies, loading up on first quarter top performers and blue chips like Apple, Chipolte Mexican Grill, Bank of America, IBM and other garbage momentum stocks, just so they can say, "see, we own that!"

Amusing that the Naz was down for the day. Somebody must have taken massive profits on Apple.

Nice to see gold and silver making a move, though they are both well off recent highs.

Dow 13,212.04, +66.22 (0.50%)
NASDAQ 3,091.57, -3.79 (0.12%)
S&P 500 1,408.47, +5.19 (0.37%)
NYSE Composite 8,206.93, +40.56 (0.50%)
NASDAQ Volume 1,831,280,750
NYSE Volume 3,598,988,250
Combined NYSE & NASDAQ Advance - Decline: 2972-2654
Combined NYSE & NASDAQ New highs - New lows: 212-
WTI crude oil: 103.02, +0.24
Gold: 1,669.30, +17.10
Silver: 32.48, 0.49

Thursday, March 29, 2012

Thursday Turnaround Mostly Vapors and Short-Covering

Let's see if we can find the good news that took the Dow back from a morning loss of 94 points to a gain of nearly 20 points by day's end?

Initial employment claims came in at 359K on expectations of 350K and the prior week was revised higher, from 348K originally reported to 364K. Well, that can't be it.

The third and final estimate for fourth quarter 2011 GDP remained steady at 3.0%. Maybe.

Moody's downgraded five Portugese banks. Nope.

Gas at the pump is still hovering around the $3.90/gallon range, on average, across the United States. Hmmm, probably not.

Those were the major headlines and issues on this Turnaround Thursday, as all the major averages fell out of bed, then through the magic of computer-programmatic algorithms, found a suitable bottom and rose through the afternoon and into the close.

In days past, chartists would say that the market put in another, higher bottom, but this intra-day bottom happened to be the low for the week. In other words, the monster rally from Monday was all eaten up by greedy, high-powered day-traders who more or less control this thinly-traded market.

Now, volume was a bit more perky today, but that would be due likely to short covering and the fact that it takes more trades to move all the indices from a cratered loss to near the break-even point. All of it is rather meaningless, since only the major banks, brokerages, fund managers and some moribund hedge funds have actually been engaging in this casino-style market since the middle of 2010, right after the flash crash scared out the last remaining individual investors.

As mentioned in yesterday's post, this is all leading up to a big rally coming either Friday (1st quarter window dressing) or Monday (first trading day of the quarter), or both. Not that the end of a quarter or the beginning of one has anything to do with fundamentals, they're just when the big boys open and close their books, so it gives them something upon which to hang their hats.

The bull market that began in March of 2009 has been one of the best in history, with the major indices all up close to or more than 100% from the bottom. Doubling your money in three years is a trick only the magicians of Wall Street can perform, though they got plenty of help from the taxpayers and rich Uncle Ben Bernanke at the Federal Reserve.

In fact, uncle Ben is still pumping out scads of greenbacks to keep the rally going, because in case anyone cares to look at the Fed's policies of the past three to four years, the stock market gains are about the only positive result among them.

Sure, sure, everyone pats Bernanke on the back for "saving" the economy, but what he really saved was the banks, which had fallen over a solvency cliff. The government has been running record deficits ever since the '08 crash, the value of the dollar is on a gentle glide-path to zero, just like Ben's interest rates, inflation continues to ravage household budgets, while low interest rates on savings are killing seniors. Housing is still declining, another credit bubble - in the form of student loans, auto leases and credit cards - is forming rapidly and small business is too busy keeping up with Washington's rule changes and mountains of regulations to actually hire anyone or expand. Entrepreneurs have been completely scared off and looking to foreign shores for opportunity.

So, really, what did Ben Bernanke save besides his banking buddies and his own job? Oh, that's right, Europe. But, but, but, that's not his job, is it?

Dow 13,145.82, +19.61 (0.15%)
NASDAQ 3,095.36, -9.60 (0.31%)
S&P 500 1,403.28, -2.26 (0.16%)
NYSE Composite 8,166.37, -21.98 (0.27%)
NASDAQ Volume 1,755,819,875
NYSE Volume 3,772,621,250
Combined NYSE & NASDAQ Advance - Decline: 2268-3291
Combined NYSE & NASDAQ New highs - New lows: 108-61
WTI crude oil: 102.78, -2.63
Gold: 1,652.20, -5.70
Silver: 31.99, +0.16

Wednesday, March 28, 2012

Are Americans Waking up to Gold?

It's a rare day indeed when Money Daily sources information from CNBC, because the on-air talent are generally stock-pumping cheerleaders for equities, but today's information presented by Steve Liesman, who offered up the results of CNBC's All-American Economic Survey in various spots on the network throughout the day, had heads spinning and eyes and ears popping when he revealed that of the 836 respondents in the survey, 37% found gold to be their preferred investment, followed by real estate at 24% and stocks a distant third, at 19%.

What this says about the stock market and American attitudes towards it partially explains the low volumes that have been a dominant feature for many months, implying (and there are numerous studies to back this up) that individual investors have nearly completely soured on stocks as stable investments due to a variety of factors, including, but surely not limited to, the financial collapse of 2008-09, the flash crash of May 6, 2010, a general distrust of Wall Street and the Federal Reserve and various other market events, such as the recent IPO failure of BATS.

What did not come out of the CNBC segment below, led off by Liesman's comment that he was "floored" by this finding, is that gold (and silver and platinum) are not only tradable investment vehicles that can be instantly redeemed for cash or bartered for other goods and services, but that the precious metals are tangible assets that not only appreciate, especially in light of dollar debasement, but are a store of value and wealth at a time in which there's an oversupply of skepticism pertaining to the management of currencies worldwide and yields on "safe" investments, such as money market funds or Treasuries are returning less than the rate of inflation.

(Note on this video: the first 6:15 covers the gold story; the remainder is on other topics.)

These stunning survey results are indicative of Americans' growing displeasure of a system which they rightly assume is unfairly slanted in favor of Wall Street fat cats and DC politicians, who engage in insider trading and other market-rigging activities with nearly universal disdain for the average American and small investor. It also destroys the notion that Americans are stupid when it comes to investing, as the "muppets," as some Goldman Sachs executives refer to their clients, appear to be more concerned about lasting value rather than quick, day-trading profits.

It was truly a pleasure to watch and listen to the various and mostly wrong CNBC commentators as they scrambled for explanations to somehow blunt the contrarian thrust of the message. Americans are not stupid and they don't like being cheated; there are two good reasons right there why more and more Americans are keeping a safe distance from stocks and Wall Street and putting their investment dollars into tangible assets, like gold.

As for the markets, todays was definitely a "risk off" event, with stocks and commodities both feeling the heat. Of course, in a yo-yo economy such as we have, one day does not make anything even closely resembling a trend, though the losses today and on Tuesday took a lot of the punch out of Monday's rally.

With just two more trading days left in the month and the first quarter, some shaving of profits should be expected prior to what are traditionally strong market up-moving days: the end of quarter "window dressing" by te fund managers expected on Friday and the first trading day of the new quarter, come Monday, April 2nd.

Dow 13,126.21, -71.52 (0.54%)
NASDAQ 3,104.96, -15.39 (0.49%)
S&P 500 1,405.54, -6.98 (0.49%)
NYSE Composite 8,188.34, -51.03 (0.62%)
NASDAQ Volume 1,764,716,250
NYSE Volume 3,854,093,750
Combined NYSE & NASDAQ Advance - Decline: 2033-3584
Combined NYSE & NASDAQ New highs - New lows: 144-46
WTI crude oil: 105.41, -1.92
Gold: 1,657.90, -27.00
Silver: 31.83, -0.78

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Tuesday, March 27, 2012

Evacuation Nation: Traders Flee in Final Hour; Fed Buys Euro Bonds

Dudley also said the central bank holds a very small amount of European sovereign debt and that he sees a “high bar” to additional purchases.
That line came from this story on Bloomberg and it leads off today because buying sovereign debt - other than US debt - is not in the Fed's charter.

Not that it will matter at all. Our brain-dead congress probably won't even notice, but it does raise some questions, like:

1. Aren't there enough buyers for all that Euro-debt?
2. How much did the Fed buy, and in what denominations?
3. With its balance sheet already over $3 trillion and stuffed full of MBS and Agency Debt, why are they buying ANY euro sovereign debt?

The most basic question, still, is, "how desperate are the world's central bankers?"

Probably pretty desperate.

Other than that, oh, and Case-Shiller showed that residential real estate values have fallen again, for the 9th straight month, bringing median US home prices back to 2003 levels (talk about a "lost decade," just a guess, but home prices have a lot more downside in them).

ON Wall Street, stocks meandered along the unchanged level most of the day (except for the NASDAQ, which had a small gain thanks mostly to Apple (AAPL)), but dropped like a rock in the last hour of trading.

Volume was dismal, but that's been the case for so long, everyone just thinks it's normal. (it's not)

Lastly, this blog's editor posted this comment over at Zero Hedge and it got some attention:

I'm 58, making me a baby boomer. I like Ron Paul, but I know he's never going to get elected, so nix that idea.

Most of my friends are BBs as well, and, as a group, they're idiots. They say things like, "we need at least $80,000 a year just to maintain our standard of living," while they have $800K in stocks and investments.

So, instead of retiring early and taking their money out of their 401ks, IRAs or whatever - many of them are past 58 1/2 - they keep on working, padding their "nest egg."

The folly of this is that by the time they retire, the world as we knew it will have ended. It already has. They'll lose in the next market downturn and keep working until they're 70 or longer to "make up the difference."

Me, I've been semi-retired in my own business since i was 43. After my business went bank-o - with plenty of help from asshat employees and dishonest corporate competitors - I decided the rat race just wasn't worth it.

I am now happy, though not content, make enough to get by and even save a little - PMs, cash, tools, necessities - and figure that I'll work my 4-5 hours a day at my own pace until I die.

Retirement, like a lot of other stuff thrown at us by the MSM, is a myth. People relying on pensions and especially SS are going to be sorely disappointed. I've already been disappointed, so it doesn't matter to me.

As for the younger crowd, they're nothing but wage-slaves. That covers about all of the demographics in America. We're royally screwed, but don't even know it and continue to keep thinking it will get better at some point.

This country has some severe deficits - in education, imagination, entrepreneurism and free-thinking. As far as I can tell, it's all been downhill since Duane Allman died, but, like I tell anyone who whines, be a warrior, and a happy one. You have to fight for everything these days. Might as well enjoy the fight.

My sister has three girls in high school and they all plan on going to college. They're all so screwed, but they don't listen to me much unless there's a crisis, so I don't talk to them much, though I do give them silver on their birthdays.

I have a feeling they'll be seeking out my counsel as time goes on.

Dow 13,197.73, -43.90 (0.33%)
NASDAQ 3,120.35, -2.22 (0.07%)
S&P 500 1,412.52, -3.99 (0.28%)
NYSE Composite 8,239.28, -49.51 (0.60%)
NASDAQ Volume 1,637,697,375
NYSE Volume 3,474,379,000
Combined NYSE & NASDAQ Advance - Decline: 2214-3380
Combined NYSE & NASDAQ New highs - New lows: 359-24
WTI crude oil: 107.33, +0.30
Gold: 1,684.90, -0.70
Silver: 32.62, -0.13

Monday, March 26, 2012

Timing the Market with Fed Chair Ben Bernanke

Timing the market is a difficult enterprise, according to just about any trader or analyst, or even the sage Bob Brinker of syndicated radio show Money Talk fame.

However, timing has gotten easier if you just follow the Chairman of the Federal Reserve, Ben Bernanke around and watch for the proper signals, which, unless you're deaf and blind, are hard to miss.

The signals are easy to discern, even for those not well-versed in matters of the economy, as is our fearless Chairman.

Here you go:

Ben opens mouth, speaks. Buy stocks.

That's it, and that's what happened today when Mr. Bernanke - he of the printing press and money-dispensing helicopters - spoke at an early-morning gathering of the assemblage at the National Association for Business Economics (NABE). It didn't really matter what Bernanke said - he says pretty much the same thing all the time - but, rather, how Wall Street interpreted his words, which they interpreted exactly the same way they have his last eight or ten speeches: He's printing more, not raising the federal funds rate for a long, long time and QE3 is on the Fed's rader. Buy, buy, buy. Don't look, don't analyze, just buy.

And it worked like a charm. The dollar was down, the euro up, but, most importantly, stocks eviscerated all memory of last week's worst-in-2012 decline. Done. Easy. Inflationary. Profit.

Dow 13,241.63, +160.90 (1.23%)
NASDAQ 3,122.57, +54.65 (1.78%)
S&P 500 1,416.51, +19.40 (1.39%)
NYSE Composite 8,288.80, +108.74 (1.33%)
NASDAQ Volume 1,625,670,875
NYSE Volume 3,467,794,000
Combined NYSE & NASDAQ Advance - Decline: 4326-1350
Combined NYSE & NASDAQ New highs - New lows: 409-28 (Thanks, Ben!)
WTI crude oil: 107.03, +0.16
Gold: 1,685.60, +23.20 (Yes, thanks, unca Benji!)
Silver: 32.75, +0.48 (Zounds, Ben, thank YOU!)

Friday, March 23, 2012

March Market Madness: BofA's Own to Rent Plan; Apple Flash Crash, BATS batty IPO

College basketball's 68-team NCAA national championship tournament (AKA March Madness) has nothing on US stock markets in terms of sheer insanity and hair-raising antics.

Just when you think it can't get any weirder in our manipulated, over-hyped markets, along comes a day like today to convince you that the absurd is now the new normal.

To start things off, Bank of America announced a plan to "invite" roughly 1000 homeowners in default on their mortgages the chance to rent the home they formerly owned.

Think of it. BofA can now use the catchy, "Rent a Piece of the American Dream" as the tag line for what they're calling, subtly, the Mortgage to Lease Program. No lie. The bank that bought Countrywide Financial and all their horrible sub-prime, Alt-A, no-doc and NINJA loans, now wants to slither out from under the rock of the robo-signing scandal, fraudulent mortgage documentation and a host of other evils, by forgiving the original loan and renting the house back to the (former) mortgagor.

The absurdity of this plan, whereby people who can't afford their mortgage payments, are somehow supposed to be able to afford rent, or even want to, in the very same home they've been living in for free for two or three years or longer, is so over the top, some people might even buy into it. The Bank of America plan is to take title to the homes, tear up the old documents (supposedly before said homeowners rush to the nearest federal courthouse, documents in hand, and file fraud charges), pay the property taxes, rent the property back to the homeowners (or squatters, if you like), at - get this - rent that's less than the original monthly mortgage payment, then flip the house, along with the paying (below market rates) tenants to some investment gang. Are there real estate investors that dumb out there?

There are so many flaws to this abhorrent plan that it is hardly worth discussing, though actual landlords - real people who own and manage rental properties - have been laughing about it all day long. And, of course, the bank won't sully its pristine reputation by dirtying its hands with the mundane tasks of landlording, like maintaining the lawns, fixing leaks and making modest improvements. No, for that, they'll hire professional property managers, adding even more cost.

The plan is supposed to roll out shortly in the states of Nevada, Arizona and New York as a pilot program. Pilot, indeed. This plan is going to crash and burn on the runway. All of this sound and fury is designed for only one purpose: to save face and costly lawsuits, now that people have awakened to the criminality and fraud that Countrywide started and Bank of America openly perpetuated. They'd be much better off and propbably millions of dollars ahead if they'd just give the properties to the people living in them and simply walk away.

With that as a background, the housing market made more ugly noises on Friday when the Commerce Department reported that new home sales fell for the second straight month, dropping 1.6% in February, despite unusually warm weather, great for home-hunting and generational low mortgage rates.

Then there was Apple's flash crash, blamed on a fat-finger trade for 100 shares well below the market price on a trading platform known as BATS, which, incidentally, went public today, but after all of one trade, shut itself down due to technical difficulties, canceling its IPO indefinitely, which, if today's performance was any indication of the quality and integrity of its service, will likely be forever.

As if that wasn't enough, today marked the absolute thinnest volume in the last ten years. It was completely dreadful, yet stocks still finished with meagre gains, though down for the week. Ouch!

Dow 13,080.73, +34.59 (0.27%)
NASDAQ 3,067.92, +4.60 (0.15%)
S&P 500 1,397.11, +4.33 (0.31%)
NYSE Composite 8,180.05, +38.72 (0.48%)
NASDAQ Volume 1,400,164,125
NYSE Volume 3,395,163,250
Combined NYSE & NASDAQ Advance - Decline: 3848-1709 (that's WACK!)
Combined NYSE & NASDAQ New highs - New lows: 133-28
WTI crude oil: 106.87, +1.52
Gold: 1,662.40, +19.90
Silver: 32.27, +0.93

Thursday, March 22, 2012

Data Suggests Economies Weakening Worldwide

Mainstream media has tried - somewhat unsuccessfully - over the past few years, to convince the American public that all is well with ours and the world's economies. Of course, the rich media stars have a vested interest in maintaining the status of the status quo, because if they have to report the truth for a change, their political masters might think of replacing them, as has been the procedure for members of the elite media who don't play along.

That's why it's important to tune out the TV blur artists and tune into internet and alternative sources, who try their best to tell it like it is, without cheerleading for the corporatists and globalists who dominate the money.

Today's news out of China and Europe was nearly matched for awfulness by more sour data on the US housing market, sending stocks uniformly lower in one of the better routs of the year so far.

Early in the US morning, China reported the HSBC flash Purchasing Managers Index (PMI) fell to 48.1 in March, a four-month low, compared with a final reading of 49.6 in February. It was the fifth straight monthly reading that showed contraction, another worrisome sign that the the world is entering what looks like a global recession.

In Europe, the miss was huge in the EU PMI data, with the composite PMI for the Eurozone declining for the second consecutive month, to 48.7 in March from 49.3 in February. The rate of decline was also accelerating, stoking fears that the recession that is well underway in many Eurozone countries is spreading fast. Rosy expectations from expert economists (one should know well by now that said "experts" only know money printing and inflation, and not reality) called for a rise to 49.8. They were sorely disappointed and stocks fell across the european bourses. Any reading on any PMI under 50.0 signals contraction and the european economies are contracting more rapidly than the optimists in Brussels and London can imagine.

In the US, the bad news was exacerbated by a trifecta of gloom from the housing sector. Mortgage rates jumped above 4.0% for a 30-year fixed mortgage, home prices remained flat for the month of January (despite excellent house-buying weather) and the December gain of 0.7% was revised radically lower, to a gain of just 0.1%. Additionally, according to the Mortgage Bankers Association, mortgage applications fell 7.4% for the week ending March 16, compared with the week before.

As many skeptics have been saying for months, as US stocks posted incredible gains since October, there really isn't any recovery to be seen, anywhere.

And that's the nub of the argument. Government data is so overtly massaged, mangled, managed and misappropriated to meet the demands of the political and financial crowd that it can barely be trusted. The best advice is to just chop two percentage points off any data to get a realistic reading, rather than rely on the bogus statistics provided by the professional guessers in the governments' capture.

Of course, middle class Americans do have choices, though for the most part they are painful. Second jobs, kids at home, driving less, and eating a leaner more nutritious diet (you feel better and eat less) rather than the junk served at fast food and mid-priced restaurant chains are choices that are being made routinely by Americans forced to tighten their economic belts.

But of course, you won't hear that on either Bloomberg of CNBC, where everything is going up all the time, no matter what. It's been 3 1/2 years since the crash of '08. Nothing's changed, except that the lies have gotten larger.

Stocks were down hard until the closing hour, when, sure enough, a rally saved the major indices from finishing a heck of a lot lower. The day will come when all the pumping and pimping by the insiders won't be enough to save our precious stock markets from complete implosion. As usual, volume was non-existent.

With one more trading day ahead, stocks are poised for their worst weekly showing of the year.

Dow 13,046.14, -78.48 (0.60%)
NASDAQ 3,063.32, -12.00 (0.39%)
S&P 500 1,392.78, -10.11 (0.72%)
NYSE Composite 8,141.33, -78.01 (0.95%)
NASDAQ Volume 1,524,230,750
NYSE Volume 3,664,415,750
Combined NYSE & NASDAQ Advance - Decline: 1559-3952
Combined NYSE & NASDAQ New highs - New lows: 94-41
WTI crude oil: 105.35, -1.92
Gold: 1,642.50, -7.80
Silver: 31.34, -0.88

Wednesday, March 21, 2012

US Economy an Express Train to Nowhere

Where to begin...

Let's start with housing, which continues to be a complete bugaboo for the friends of the Fed (FOF), meaning governments at all levels, financial institutions, public sector employees (overpaid, irresponsible), welfare and entitlement recipients and anybody who spends beyond their means.

This morning, the NAR released their almost-fully-discredited monthly report on existing home sales, which, despite marvelous weather across most of the country, fell 0.9% in February as compared to January's figures. The NAR was quick to point out that sales rose 8.8% from a year earlier to a seasonally adjusted annual rate of 4.59 million.

Median prices were nearly flat, at $157,100, just 0.1% higher than February 2011.

It wasn't such a disheartening report, overall, but points to the idea that any uptick in activity is usually short-lived and not sustainable. Prices have remained mired in the mud, and, with interest rates on mortgages rising recently, March may have come in like a Lamb, weather-wise, but it may go out like a hungry lion in terms of real estate.

Then there was the brilliantly-timed commentary by Goldman Sachs chief global equity strategist, Peter Oppenheimer, titled "The Long Good Buy" which postulates that "the prospects for future returns in equities relative to bonds are as good as they've been in a generation."

Not to throw much cold water (a bathtub of ice might be more appropriate) on this particular bit of financial wisdom, but Mr. Oppenheimer and his buddies at the giant squid must think the muppets are prime for a fleecing. Stocks have not been at these current levels for more than 3 1/2 years, the major indices have pretty much doubled since the bottom of March '09 and he thinks NOW, today is a good time to buy stocks?

Not to be too pushy or overburdened with facts, but isn't the oldest bit of market timing knowledge to buy low, sell high? Oppenheimer seems to want to stand that time-worn adage on its head, which, considering the extent to which Goldman Sachs will go to defraud the public, the government and even its own clients, is about par for the course. (A video, assessing the relative value of Mr. Oppenheimer's call appears at the end of this post.)

As far as stocks are concerned, they are currently stalled out at high levels and while they floated along in bifurcated fashion through most of today's session, there was some significant selling pressure at the close. It probably means nothing, but if you think a quick selloff in stocks at the end of the day is a sure sign to buy more gold and silver, nobody around these parts is going to do anything to dissuade you from that line of thinking.

As usual, volume was unseen and at levels indicating a lack of interest, sponsorship or near-panic, but we've been over that bridge too many times already. Let it just be said that there are many, many, many fewer individual investors playing stocks than there were five years ago. Some went broke, some profited but are scared to death of the markets, others are merely awaiting a return to normalcy, something that isn't likely to occur until there's a crash, a credit "event", a war or something very ugly to shake the stranglehold of the banksters and politicians to their core.

Doug Casey offers three variations on the definition of a depression, plus some valuable insights in an interview, titled Doug Casey on the Illusion of a Recovery. It's an intelligent read. (Hint: Doug likes gold)

Dow 13,124.62, -45.57 (0.35%)
NASDAQ 3,075.32, +1.17 (0.04%)
S&P 500 1,402.89, -2.63 (0.19%)
NYSE Composite 8,219.33, -21.95 (0.27%)
NASDAQ Volume 1,551,352,875
NYSE Volume 3,534,241,000
Combined BYSE & NASDAQ Advance - Decline: 2776-2764
Combined BYSE & NASDAQ New highs - New lows: 174-32
WTI crude oil: 107.27, +1.20
Gold: 1,650.30, +3.30
Silver: 32.23, +0.39

Tuesday, March 20, 2012

Housing Not So Rousing, Saudis Naughty on Oil

How's that recovery coming along?

In housing, not so well, it turns out.

Housing starts fell from 705K in January to 698K, annualized, in February, with much of the new construction boosted in the multi-family, "5 units or more" category (apartments), which implies a couple of things. First, investors seem to believe that single-family home construction is a fading business, and, second, most of lower and middle class Americans cannot meet the current, stringent lending requirements needed to qualify for mortgages, so they will rent instead of own.

That's something of a setback for the "American dream of home ownership" crowd that watches in horror as each month more and more existing homes sell for less than their listed price, even more become vacant eyesores due to bank and tax foreclosures as the economy stumbles along at maybe two percent growth.

Building permits rose to 717K in February from 682K in January, probably due to the unusually warm weather across most of the country, though the apparent contrariness in that metric may be merely stealing from the future and is also the very first step in construction - a long way from completion, which, as people in Las Vegas and elsewhere will contend, often never happens.

With those numbers released before the open as a backdrop, stocks opened sharply lower and remained in the red throughout the session, though the NASDAQ and S&P 500 had interesting intra-day rallies that took them well off their lows into the close.

Oil got shocked down as the Saudis pledged to pump more crude, Iran assured its neighbors that the Strait of Hormuz would remain open and more signs that the Chinese economy is slowing emerged.

Overall, it was a good day for consumers and not such a great one for oil barons and one-percenters, though financial stocks were among the leaders. As usual, volume was weak and maybe just a mirage. Silver continues to slump, now down into a great buying range below support at $32/ounce.

Dow 13,170.19, -68.94 (0.52%)
NASDAQ 3,074.15, -4.17 (0.14%)
S&P 500 1,405.52, -4.23 (0.30%)
NYSE Composite 8,241.27, -56.20 (0.68%)
NASDAQ Volume 1,508,268,500
NYSE Volume 3,656,522,250
Combined NYSE & NASDAQ Advance - Decline: 1753-3806
Combined NYSE & NASDAQ New highs - New lows: 116-40
WTI crude oil: 105.61, -2.48
Gold: 1,647.00, -20.30
Silver: 31.83, -1.12

Friday, March 16, 2012

Stock Split as Week Ends with Dull Session

Stocks ended the week in mixed fashion on slightly elevated volume, most likely due to quadruple-witching options expiry.

There used to be a time when stocks would experience high volatility on options expiration, but those days seem to be gone, now that the entire market is being front run by insiders and HFT operations (many of whom are one and the same firms).

The big gains on Tuesday were responsible for the bulk of this week's advances, as there was virtually no follow-through to the big ramp job.

Some economic data led to the dull, confused markets this Friday. CPI for February came in with a 0.4% gain, with Core CPI up 0.1%, as most of the inflation was due to higher food and (mostly) energy prices. February Industrial Production was flat and Capacity Utilization fell by 0.01% in February, to 78.7%.

The University of Michigan's consumer sentiment index fell a full point for March, to 74.3.

Dow 13,232.62, -20.14 (0.15%)
NASDAQ 3,055.26, -1.11 (0.04%)
S&P 500 1,404.17, +1.57 (0.11%)
NYSE Composite 8,270.40, -23.68 (0.29%)
NASDAQ Volume 1,993,724,375
NYSE Volume 4,893,666,000
Combined NYSE & NASDAQ Advance - Decline: 2674-2978
Combined NYSE & NASDAQ New highs - New lows: 265-25
WTI crude oil: 107.06, +1.95
Gold: 1,655.80, -3.70
Silver: 32.60, -0.12

Thursday, March 15, 2012

Stocks Higher

Seriously, you're not watching the tournament?

Besides, it was just another normal up day for the US equity markets. We'll talk about bond yields next week.

Dow 13,252.76, +58.66 (0.44%)
NASDAQ 3,056.37, +15.64 (0.51%)
S&P 500 1,402.60, +8.32 (0.60%)
NYSE Composite 8,246.72, +61.41 (0.75%)
NASDAQ Volume 1,688,321,125
NYSE Volume 4,278,291,000
Combined NYSE & NASDAQ Advance - Decline: 3535-2067
Combined NYSE & NASDAQ New highs - New lows: 241-44
WTI crude oil: 105.11, -0.32
Gold: 1,659.50, +16.60
Silver: 32.73, +0.55

Wednesday, March 14, 2012

Bankster Kleptocrats At It Again: Bank Stocks Up, Gold, Silver Down

One of the more tried and true methods of tape-watching is what's known in the business as "follow-through" - the tell-tale next day move in a stock or an index following a bold rally.

A lack of follow-through or extension of the rally usually means that the initial move was either false, poorly-constructed, had less-than-optimal participation or a combination of all of those.

If the tape is correct the day after the biggest one-day upside move in stocks this year, then today's trading certainly did little to confirm the veracity of the rally. With the Dow and NASDAQ up marginally at best, the slight decline in the S&P and the pretty healthy drop on the NYSE Composite reveal the tell-tale signs of a market rally surred on entirely by insiders, those of the Wall Street bankster crowd commonly known as the kleptocracy.

Their aim, obviously, was to instill a desire for individual investors to jump into those juicy big bank stocks like Bank of America (BAC), JP Morgan Chase (JPM), Goldman Sach (GS) and everybody's favorite, Citigroup (C), which incidentally was one of the four which failed the Fed's marginally-constructive stress tests on Tuesday.

The other fairly obvious feature of the Tuesday rally was the often overlooked calendar, which shows clearly that Friday is the third Friday of the month, meaning, yes, siree!, Tuesday's move was decidedly correlated to making oodles of cash on front-end, expiring call options.

Want proof? Take a look at the imbalance of open interest puts to calls on the 40 and 41 strikes of Friday's expiring options in JP Morgan. There were nearly 69,000 calls at those two strike prices, compared to about 25,000 puts. Since we all know there's no free lunch in America - unless you're a school-kid with cheap parents or a bankster will plenty of one-percenter street cred - the imbalance should be a tip as to what happened late yesterday afternoon, when Jamie Dimon jumped the shark and released his firm's (JPM) dividend upgrade before the Fed could expel the stress tests of the other banks. Talk about front-running! Jaime wrote the book with that move.

And for more proof, look below at the Advance-Decline line for today. The rally was definitely sold into by money smarter than that of most people. Volume was at its usual dismal level again today as well.

Just in case anyone thinks the Fed's stress tests were anything more than a call to action from the Fed to individual investors who don't believe a word that comes from ben Bernanke's mouth, one should definitely take a read of Chris Whalen's excellent article at Zero Hedge, Bank Stress Tests and Other Acts of Faith

One needn't be a bank examiner or financial wizard to understand what Whalen means when he says things like,
So when I look at the Fed stress tests, which seem to be the result of a mountain of subjective inputs and assumptions, the overwhelming conclusion is that these tests are meant to justify past Fed policy.
But as we have written over the past several weeks in The Institutional Risk Analyst, the Fed does not want to believe that there is a problem with real estate.

Face it, the Fed's stress tests of 19 of the nation's largest banks were nothing more than a pimp act for their favorite bailout buddies, designed to boost their share prices so insiders could profit at the expense of smaller, less-savvy investors and traders.

If that wasn't enough - and you know it wasn't - the raid on gold and silver today speaks volumes about the un-American policies the Fed pursues. According to the Fed, holding near-worthless scraps of paper like stock certificates of shares in illiquid banks or constantly-devaluing Federal Reserve Notes is far more prudent for us "little people" (or as Goldman Sachs executives like to call their clients, "muppets") than holding onto those relics of the past, gold and silver.

The gloves are off, folks. The Fed, the banksters, the kleptocracy of corporate America has had them off for a long time, bare-knuckling the American middle class like a punch-drunk patsy. It's time Americans with brains (maybe 30% or so of the population) rip off the Everlasts and land a roundhouse on the chops of these wealth thieves.

Close out the 401k, pension plan or whatever vehicle they're "managing" your money in and go buy some silver coins or bars, gold, or land, raise some chickens or pigs, grow some corn or tomatoes or broccoli, but at least stop putting your money into the wall Street Ponzi scheme.

That's going to be easier said than done for a lot of people who have their futures tied into their government sponsored pension plans, which, by the way, will pay out a lot less than expected when the s--- hits the fan, but, if the outflows from mutual funds over the past four years is any indication, you don't want to be one of the last players in the market (otherwise known as bagholders) when the rugs gets pulled out and the bottom drops out of the bottomless pit the financial "industry" has created.

It could be two years, two months or two weeks before the next market "event" but you don't want to be around when it happens and you definitely don't want it all to fall on your pretty little head, now do you?

Tomorrow, we'll take a look at the moves in bonds, and why what they're telling us is very, very bad.

Dow 13,194.33, +16.65 (0.13%)
NASDAQ 3,040.73, +0.85 (0.03%)
S&P 500 1,394.28, -1.67 (0.12%)
NYSE Composite 8,180.17 54.30 (0.66%)
NASDAQ Volume 1,627,102,500
NYSE Volume 4,446,792,500
Combined NYSE & NASDAQ Advance - Decline: 1631-4036
Combined NYSE & NASDAQ New highs - New lows: 318-38
WTI crude oil: 105.43, -1.28
Gold: 1,642.90, -51.30
Silver: 32.18, -1.40

Tuesday, March 13, 2012

Can This Fairy Tale Market Be Believed? Fed Stress Tests; Jaime Dimon Pumps JP Morgan

Just a day after the lowest volume session in the last ten years or so, stocks jumped out of the gate and skyrocketed after the usual FOMC we're-doing-nothing release and JP Morgan's announcement of a quarterly dividend hike of $0.05 (from 25 to 30 cents) and a $15 billion stock buyback program.

Apparently Jaime Dimon, Morgan's CEO, thinks his company's stock is too cheap and could not contain his excitement as he jumped the shark, upstaging the Fed's bank stress test announcements which were released just after the close. Hard to figure, since JPM was already up (at yesterday's close) more than 43% since it bottomed out at a close of 28.18 on November 23, just about 3 1/2 months ago. Apparently, Jaime subscribes to the banker's creed, "math is so overrated."

Morgan's timing was appropriate, coming right after the Fed-speak, precisely at 3:00 pm ET, which everyone knows is the "magic hour" for stocks and whirring HFTs. The algos really cranked up hard in the final hour of trading, sending the Dow up by more than 100 points and the NASDAQ shooting past 3000 at the close for the first time since 2000.

As to those stress tests, 15 of 19 banks tested passed with flying colors, of course, being - according to the Fed - sufficiently capitalized to sustain conditions such as 13% unemployment, a 21% decline in housing prices and probably Lindsay Lohan failing another sobriety check. Among those which failed were Citigroup, Sun Trust, Met Life and Ally Financial. It's simply ludicrous to believe in test results administered to subjects which are wholly funded, pampered and coddled by the test-giver.

The Fed's stress tests were supposed to have been released at 4:30 pm ET on Thursday, but apparently some bright economist at the Fed realized that most of America would be occupied with first round games of the NCAA tournament at that juncture, so they, without announcement, sent them out to the rabid financial press corps today, right after the closing bell. Nothing like a little pile on to get the new out on what would have otherwise been a fairly uneventful Tuesday afternoon.

The whole afternoon was such a departure into overt silliness that it can hardly be believed that it's anything more than pure pumping by the financial entities which now own the entire market, from opening trade to closing casino-sounding bells and whistles.

Since individual investors have been pouring out of stocks at a record pace since 2008, the message is pretty clear. Despite all the jolly good news, nobody believes it and nobody is going to be buying it, especially at these new nose-bleed levels.

Join the club. Get completely out of stocks and just watch the stupid party. US euity markets are not real anymore. Since everything is going so swimmingly, who needs stocks? We'll all be millionaires several times over with all the money sloshing around these days. And, even if the markets are completely contrived and meaningless, it's all about perception, anyhow, no?

Dow 13,177.68, +217.97 (1.68%)
NASDAQ 3,039.88, +56.22 (1.88%)
S&P 500 1,395.96, +24.87 (1.81%)
NYSE Composite 8,234.48, +148.20 (1.83%)
NASDAQ Volume 1,681,104,625
NYSE Volume 4,329,381,000
Combined NYSE & NASDAQ Advance - Decline: 4496-1184
Combined NYSE & NASDAQ New highs - New lows: 375-27 (Zounds!)
WTI crude oil: 106.71, +0.37
Gold: 1,694.20, -5.60
Silver: 33.58, +0.17

Monday, March 12, 2012

Golf Beats Dead Markets Any Day of the Week

Because the markets in this country - and just about everywhere else in the world - are so ridiculously contrived, manipulated and thinly-traded (meaning, they can't make realistic markets for a lot of stocks), I decided to cu out of here around 3:00 pm ET and play nine holes of golf.

Now, that may sound like a fairly mundane shirking of responsibility, but the fact of the matter is that I live in Rochester, NY, where the average high for March 12 is about 42 degrees, hardly good golf conditions. Today, however, the high temperature was around 62 degrees, and I played the nine holes in shorts and a short sleeve shirt. Shot a 54, which, for me, isn't bad, considering it was only the second time I've played in two years and outside of a 10 on the 16th hole (we played the back nine), it was a satisfying round, especially the tee shot I plunked down on 18 within 20 feet of the pin, which I then cozied up an tapped in for a par.

Since spending $12 playing golf makes more sense these days than putting money into this ridiculously-valued stocks market, the break from the routine was appreciated. Besides, with Wall Street on hold in anticipation of the Fed's FOMC doing nothing tomorrow besides possibly dropping "hints" on whether there will be more QE (free cash to big banks), it seemed prudent to bug out for an afternoon.

Checking back in here after 9:00 pm ET, it appears I didn't miss much, though this story: Entire Arena Football team cut during pregame meal at Olive Garden caught my attention. Only in America, the home of income disparity, can Peyton Manning, who missed all of last season with a neck injury and is 36 years old (nearing end of career), be traveling around the country checking out which franchise will pay him multiple tens of millions of dollars, while these poor grunts are eating at Olive Garden and being cut because the team, and the league, doesn't want to pay them more than $500 per game. Heck, that's what old AFL players were making back in the sixties.

Anyhow, don't get too excited when the FOMC says the federal funds rate will remain at zero to 0.25% tomorrow, because, after all, God created economists to make weathermen look good.

Also, and correct me if I'm wrong, but today's volume was easily the lowest for any full trading day in the past ten years, probably longer. Think maybe some people have lost faith in the Wall Street money machine? Hmmm? Just maybe?

This is a broken system my friends and it's only a matter of time before it all comes tumbling down. Two weeks, two years? Who knows? The people running the show are really good at impressions, and that's seemingly all that matters these days.

Dow 12,959.71, +37.69 (0.29%)
NASDAQ 2,983.66, -4.68 (0.16%)
S&P 500 1,371.09, +0.22 (0.02%)
NYSE Compos... 8,086.28, -15.83 (0.20%)
NASDAQ Volume 1,343,738,750
NYSE Volume 3,086,209,000
Combined NYSE & NASDAQ Advance - Decline: 2496-3094
Combined NYSE & NASDAQ New highs - New lows: 201-35 (yeah, really?)
WTI crude oil: 106.34, -1.06
Gold: 1,699.80, -11.80 (complete BS)
Silver: 33.41, -0.80 (utterly absurd)

Friday, March 9, 2012

Greece OK for Now; NFP Prints at 233K; Trading Volume Pathetic

Two major news events largely determined the tenor of trade on US markets Friday.

The Greek restructuring plan went as the global banking cartel liked, with non-governmental lenders taking a 53.5% haircut on bad Greek bonds, while the troika's funding facilities remained intact.

Triggering the collective action clauses and a credit "event" according to the ISDA (International Swaps and Derivatives Association) in which affected parties will settle up on March 19. With just a little over $3 billion in Credit Default Swaps affected in the deal, the effect is little more than a rounding error in the international scheme of things, or roughly the amount Bank of America writes off in a typical quarter.

Prior to the open, the BLS offered another positive reading on unemployment, with the official rate staying unchanged at 8.3%, as the US economy created 233K jobs during February, strongly aided by a raft of temporary hires and the usual fudging by the Labor Department.

Like it or not, the impression is that the US continues to emerge from the depths of the Great Recession, as the calendar turned three years old on the current bull market in equities.

For the week, the major indices were little changed, and, despite all the hoopla, trading volume continued to be incredibly weak, especially on Friday, one of the lowest-volume days of the year, which has seen nothing but poor volume.

Market participants appear to be smug over the developments in Greece and Europe, which continues to avert crises on a regular basis, even though Greece is now in a depression, their latest quarter GDP showing a 7.5% decline.

But, hey, it's the weekend and college basketball is heading into its wild March Madness phase, so relax and enjoy seems to be the operative mindset, though commodity prices, especially in oil, gold and silver, tell a different story.

Dow 12,922.02, +14.08 (0.11%)
NASDAQ 2,988.34, +17.92 (0.60%)
S&P 500 1,370.87, +4.96 (0.36%)
NYSE Composite 8,102.13, +19.75 (0.24%)
NASDAQ Volume 1,553,531,125
NYSE Volume 3,527,470,750
Combined NYSE & NASDAQ Advance - Decline: 3837-1653
Combined NYSE & NASDAQ New highs - New lows: 278-26
WTI crude oil: 107.38, +0.80
Gold: 1,711.50, +12.80
Silver: 34.21, +0.38

Thursday, March 8, 2012

Market Knee-Jerk Response to Greek Deal is a Bullish One

Though there has been no official announcement, apparently, market participants believe that the Greek restructuring of their private debt (a 53.5% haircut for bond-holders) is a done deal.

This was always assumed to be the case, as nobody wanted a credit event and a triggering of the collective action clauses (though that WILL happen) and thus, force payouts of CDS as if Greece actually did default (which it of course did, which is why it suddenly changed its laws regarding bonds).

If all of this sounds too fantastic or incomprehensible is because all reporting today was based entirely upon rumors. The actual tally of how many and what percentage of the private bond holders agreed to the deal won't be known until 1:00 am ET at the earliest and probably not until 8:00 am ET, when the group arranging the deal will hold a news conference.

As usual, the most measured and unbiased reporting is being done by the Christian Science Monitor which has as its headline, Greece to investors: take a haircut so we can get our bailout and includes this little gem a few paragraphs into the article:
According to the deal the Greek government negotiated with the Institute of International Finance (IIF), which represents most of Greece's private sector creditors, investors will write off 53.5 percent of debt – which amounts to a waiver of 74 percent when the loss in future interest is taken into account – and exchange the rest of bonds they are holding into new papers which are worth less, have a longer maturity, and pay less interest.
So, according to equity market participants, having private bondholders - mostly banks and hedge funds - take a 74% loss on their investments - only to repackage a new deal to the same defaulting party - is better than having a country actually default on its debt and start over. Plus, this agreement paves the way for Greece to take on more debt that it can't possibly repay, ensuring that we'll reprise this particular farce all over again somewhere down the road.

If that is what passes for good news these days, then there's little wonder why most individuals are not invested in the stock markets, nor want to be. It also serves as a prime example of why most people don't trust banks, governments or the media, because instead of having debtors who can't pay back loans default, the prevaricators of this particular brand of financial suicide actually prefer pretending and replaying the same canard over and over again (like the US government and the Fed did with the too big to fail banks in 2008-09), all along adding even more debt, more derivative bets (CDS) and more equity market euphoria to the calculus.

It's a dangerous game, one in which any individual large player could pull the rug out from beneath everyone else at a moment's notice, although that's a scenario unlikely to occur because it would be the equivalent of playing Russian roulette with all chambers loaded.

If today's good news is that Greece isn't defaulting - at least not today - and the markets respond positively, one must ponder what would happen if there was some actual good news. Recalling images of the late Great One, Jackie Gleason, from the Honeymooners, "to the moon, Alice, to the moon."

Dow 12,907.94, +70.61 (0.55%)
NASDAQ 2,970.42, +34.73 (1.18%)
S&P 500 1,365.91, +13.28 (0.98%)
NYSE Composite 8,082.36, +102.58 (1.29%)
NASDAQ Volume 1,620,493,125
NYSE Volume 3,442,931,750
Combined NYSE & NASDAQ Advance - Decline: 4295-1323
Combined NYSE & NASDAQ New highs - New lows: 199-30
WTI crude oil: 106.58, +0.42
Gold: 1,698.70, +14.80
Silver: 33.83, +0.25

Wednesday, March 7, 2012

Who Goosed the Stock Market? The PPT Did, That's Who

The more one endeavors to make sense of the movements of the major equity indices, the more one becomes convinced that there is major manipulation going on behind the scenes and today was just another prime example to throw into the conspiracy hopper.

While the Dow gained 78 points today, all of the gains were produced in roughly a one hour period, from 10:30 am to 11:30 am ET, on extremely light volume. The Dow moved from barely unchanged (12,760) to a gain of nearly eighty points (12,340), which just so happened to be roughly where it closed.

Did Greece's private debt holders agree to a deal at that hour? No.

Did ADP report a gain of 216,000 net private job gains for February. Sorry, that happened at 8:15 am, and the response was pretty muted.

So... let's see. Low volume (if today wasn't the lowest volume of the year, it was certainly close), stocks sliding back near unchanged right after a major selloff the previous session... like the calvary riding to the rescue in a cliche old time Western movie, the PPT - otherwise known as the Plunge Protection Team and officially known as the President's Working Group on Financial Markets has been hard at work ever since 1988, keeping US stock indices safe from free-falling collapses and lately, from even slight declines that might make the markets appear to be as weak as they really are and boosting stock prices when the trading activity all but dries up.

While Joe and Jane Sixpack reads just the headlines and understands nothing except, "honey, our retirement pension fund is up again!" out in the real world its endless money printing and insider stock manipulations that keep the American Dream alive and well.

It's become so blatant and obvious that it is rarely commented upon by even the most suspicious bloggers and underground financial writers. The mainstream press never mentions that the PPT has offices right in New York's financial district - the easier to send orders flying into the fray - or that said offices are owned by the NY Fed.

So, forget everything you just read and move along. You are not supposed to think, analyze or ask any questions. There's nothing to see here, or at least nothing you're supposed to see. In ten seconds your computer will automatically destroy this posting, and your brain will be wiped clean of the heretical commentary presented.


Dow 12,837.33, +78.18 (0.61%)
NASDAQ 2,935.69, +25.37 (0.87%)
S&P 500 1,352.63, +9.27 (0.69%)
NYSE Composite 7,979.83, +59.69 (0.75%)
NASDAQ Volume 1,560,044,000
NYSE Volume 3,515,704,500
Combined NYSE & NASDAQ Advance - Decline: 4287-1316
Combined NYSE & NASDAQ New highs - New lows: 93-43
WTI crude oil: 106.16, +1.46
Gold: 1,683.90, +11.80
Silver: 33.58, +0.80

Tuesday, March 6, 2012

Individual Investors Not Buying Growth and Recovery Myths

Institutional investors, like hedge funds, mutual funds, retirement funds and the like, have a vested interest in keeping stock prices on the rise, such as has been seen in the first few months of this new year.

On the flip side, individual investors have shied away from equities in a meaningful way since the economic collapse of 2008 and few have ventured back. Their reasoning became evident today as stocks were hard-hit globally, beginning overnight in Asia and accelerating with large losses on the european exchanges. By the time the opening bell rang in New York, Wall Street was bracing for a world of hurt.

Remember that disturbing, repeating pattern mentioned at length here yesterday? The one in which stocks fell sharply at the open, only to gradually improve throughout the remainder of the session?

As it appears today, those dips and rises might have been nothing more than smart money getting out ahead of the carnage to come. The repeated attempts and failures for the Dow to close over 13,000 were at least a set-up for a trend top in stocks and may have signaled an impending correction or even outright rout.

The reasons for weakness in stocks could have been predicted by the constancy of low trading volumes, mixed to negative economic data and the non-confirmation by the transportation index. Wall Street's professional prostelitizing over the need for individuals to "get back into the market" or "stay invested" has been running contrary to evidence for quite some time, and it may finally begin to sink in that continual growth is an impossibility and the US "recovery" is nothing but a well-managed myth, propagated by the control freaks in Washington and New York and promulgated by the whores of the media.

Wall Street's five-month-long, liquidity-fueled bogus rally is coming to a quick end. All the cheerleaders for "dow 13,000" are going to look pretty stupid in coming weeks and months as the widely-watched average hovers closer to 12,000 and possibly even lower. How low it will go nobody knows for sure, though there are elements already in place, like Greece, Europe in recession, slowing economies in China, India and Brazil, high food and fuel prices, that could plunge the world into a re-enactment of the 2008 crash, only that this time, fed funds rates are already at zero and tens of trillions of dollars have been thrown at the problems without results.

Today's drop was the first triple-digit decline for the Dow of the new year and the largest percentage decline since November 23. That it comes a day before the release of the ADP private employment data report - which serves as a proxy for Friday's NFP call - is probably not a coincidence. Neither is it coincidental that private bond investors in the Greek bailout will vote on whether or not to accept the terms of a debt restructuring (read: haircut) on Thursday. Bad news might remain in the shadows for a while and might be purposely ignored, but eventually it surfaces, and by then it's usually worse than expected.

In the globally-connected world created by the Keynesian genii central bank economists, Greece's problems are Europe's and our own, and Chinas and everybody's. The contagion which will proceed from Europe will engulf all markets and all countries. Central bankers will have two options: lying and printing, which has been proven ineffective, or, bank liquidations, sovereign defaults and global deflation. They will likely opt for more "pretend and extend" tactics, leading to more inflation and more phony markets in which people of common sense will not participate. The other, proper, Austrian-style solution may be more painful at first for some, but once the toxic debts and zombie banks are flushed from the system, real recovery can begin.

This week and the next two may prove to be as pivotal in terms of the survivability for the entire global economic structure as any time in the last thirty years.

One should not be worried unless one has a job, a pension or most of one's wealth in stocks because the one-percenters of the world are about to become even more vilified than ever as the world's problems are brought out into the open and some may even join the ranks of the feeble top 20 percent. What the global nanking and political cartel has wrought will almost surely destroy more than a few ill-gotten fortunes and many more honestly-made ones, but, whatever path is taken, more economic pain is nearly assured, though this time it will be more evenly distributed.

In fact, those clinging to the bottom rungs of the economic ladder may fare best of all.

Dow 12,759.15, -203.66 (1.57%)
NASDAQ 2,910.32, -40.16 (1.36%)
S&P 500 1,343.36, -20.97 (1.54%)
NYSE Composite 7,920.13, -171.14 (2.12%)
NASDAQ Volume 1,870,041,375
NYSE Volume 4,171,692,250
Combined NYSE & NASDAQ Advance - Decline: 724-4956
Combined NYSE & NASDAQ New highs - New lows: 50-82 (flipped, finally)
WTI crude oil: 104.70, -2.02
Gold: 1,672.10, -31.80
Silver: 32.78, -0.91

Monday, March 5, 2012

Troubling Pattern Continues on Mixed Data

For some reason, stocks continue to take on the same daily trading pattern that has persisted for roughly four weeks now. All of the major indices will start sharply to the downside, only to gather momentum throughout the session.

How stocks go up, after being down early, is a matter for some conjecture. It could be simply a function of the HFT computers which account for 70% off all trading action, it could be an algo designed to take profits early in the day and reinvest later, or it could be something sinister, like market manipulation via the PPT (Plunge Protection Team), which, despite scary market conditions and a shaky economy, still wants to give the impression that the US is in the midst of a recovery.

Whatever the case, it's disturbing to see the same or similar patterns, day in and day out, but conclusions cannot be drawn on patterns alone. Suffice it to say that it's out there for everyone to see - like a zombie market rising from the dead - and until there's a positive catalyst or the wheels fall completely off this liquidity-fueled rally (now into its sixth month without even a five percent pullback), there's little anybody can do about it except confirm its existence.

There were plenty of reasons to sell off today, as China lowered its 2012 GDP estimate from 8% to 7.5% (we should be so fortunate). That half percent may be insignificant, though it is largely understandable, as global growth has pretty much stalled for the past two years and China has been the major exporter during that time. As the People's Republic turns its attention more to the domestic side of things, it should be a signal that the export boom that was largely fed by the US and Europe has come to an end.

European PMI fell to 49.3 in February from 50.4 in January, another sign that Europe is careening toward a recession, and that certainly cannot be good news for the US, either. Besides the absurdity of their dragged-out debt crisis, high prices for fuel and food, and the necessity for structural reform, Europe continues to appear as the proverbial straw that will break the back of the global economic camel. All bourses in Europe finished in the red on the day.

Here in the US, the ISM Services Index showed some resilience, gaining to 57.3 after a print of 56.8 in January, leading some commentators to suggest that strong data in the services sector should result in a lower unemployment rate for February when the BLS issues its non-farm payroll data set on Friday.

One of the more reliable indicators, however continues to display weakness. That would be the Dow Jones Transports, which has not followed the rally of late. After peaking on February 3rd, the index has lost close to 5% since, and any Dow Theory analyst worth his salt will tell you that if the Transports don't confirm a move in the blue chip, there's almost certainly trouble ahead.

And again today, trading volume was absolutely dismal.

Then again, the world didn't end in 2008, but the road back has been long and hard. Food for thought.

Dow 12,962.81, -14.76 (0.11%)
NASDAQ 2,950.48, -25.71 (0.86%)
S&P 500 1,364.33, -5.30 (0.39%)
NYSE Composite 8,091.28, -33.90 (0.42%)
NASDAQ Volume 1,677,286,125
NYSE Volume 3,402,625,250
Combined NYSE & NASDAQ Advance - Decline: 2383-3225
Combined NYSE & NASDAQ New highs - New lows: 132-49 (trending toward convergence)
WTI crude oil: 106.72, +0.02
Gold: 1,703.90, -5.90
Silver: 33.70, -0.83

Friday, March 2, 2012

Down Day All Around as Week Ends; Spain says 'No' to Austerity

Either everybody and their brothers-in-law were taking profits on Friday or there's some kind of disturbance in the Force, because not only were stocks down, but so were oil, gold and silver.

Just for the record, it was another brutally low volume day in equities and very light on economic data. Sure enough, however, our friends in Europe attempted to make things interesting as Spanish Prime Minister Mariano Rajoy defied his EU overlords in Brussels by setting a softer budget target than originally agreed upon.

The targeted budget deficit for 2012 was supposed to be no larger than 4.4 percent of GDP, but Rajoy targeted a deficit that will amount to 5.8 percent of assumed GDP.

Of course, the numbers game is a nebulous one, especially considering Spain's unemployment rate hovering around 20% nationwide.

As EU leaders prepared for a summit beginning Saturday in Brussels, they were greeted by hundreds of union protesters railing against austerity. Similar protest were held in Greece and Spain. Across Spain, students protested cuts to education budgets and the demonstrators clashed with police in Barcelona.

The Spanish demonstrations were large, estimated in the tens of thousands.

Back here on planet America, there were no protests of any size to speak of, though it seemed like everyone was more in a mood to forget about money and budgets and just go home for the weekend.

Dow 12,977.57, -2.73 (0.02%)
NASDAQ 2,976.19, -12.78 (0.43%)
S&P 500 1,369.63, -4.46 (0.32%)
NYSE Composite 8,125.17, -49.94 (0.61%)
NASDAQ Volume 1,754,632,875
NYSE Volume 3,346,330,500
Combined NYSE & NASDAQ Advance - Decline: 1748-3844
Combined NYSE & NASDAQ New highs - New lows: 185-42 (beginning of convergence?)
WTI crude oil: 106.70, -2.14
Gold: 1,709.80, -12.40
Silver: 34.52, -1.14

Thursday, March 1, 2012

Metals, Stocks Rebound; Oil Continues Relentless Rise

After a one-day hiatus from the usual upward trend, stocks, and especially gold and silver rebounded in the midst of the liquidity-fueled rally, though the move in the metals - especially silver - was stronger than the one in equities.

Keeping the lid on stocks somewhat throughout the session were lingering fears of an oil price shock, as WTI crude rose again, mostly on nothing but idle speculation over the situation in Iran, which is largely unfounded and without credibility as the closure of the Strait of Hormuz by the Iranians would be tantamount to economic suicide since they also use the strait to ship their oil produce.

Nonetheless, oil was up almost $2.00 on floor trading and wholesale gas prices rose by another nine cents, a cost which will almost all be passed along to the (un)happy motorists.

The national average for unleaded regular stood at $3.78/gallon according to AAA, with the highest price on the mainland being found in California ($4.33) and the lowest in Wyoming, at $3.17. The states of Oregon, Washington, New York and Illinois are closing in on the $4.00 mark, despite national consumption having dropped to historic low levels over the past six months.

Also putting a damper on investor enthusiasm was today's big miss on the ISM Index, which came in at 52.4 for February, after a reading of 54.1 in January and expectations for 54.7, though that was tempered with another solid reading on initial unemployment claims, which again came in at 351K. Last week's 351K was revised upward to 353K.

Even though gold didn't even come close to recovering the losses from Wednesday, it is still above its trend line and the price of silver moved back above what everyone believes to be key support/resistance at $35.50.

With little on the calendar for Friday, traders will be looking for any kind of catalyst. Perhaps our friends across the pond in Europe will provide some theatrics. They've been eerily quiet for almost two full days... seems like an eternity.

Dow 12,980.30, +28.23 (0.22%)
NASDAQ 2,988.97, +22.08 (0.74%)
S&P 500 1,374.09, +8.41 (0.62%)
NYSE Composite 8,175.20, +61.95 (0.76%)
NASDAQ Volume 1,887,835,875
NYSE Volume 3,910,319,750
Combined NYSE & NASDAQ Advance - Decline: 3532-2096
Combined NYSE & NASDAQ New highs - New lows: 244-30
WTI crude oil: 108.84, +1.77
Gold: 1,722.20, +10.90
Silver: 35.66, +1.02